I have seen reports that the EPA will release regs on fracking in December. I can see how they might put this off in the face of other bad economic news, but something appears to be in the planning stage and is not likely to be more permissive than current regs. Depending on how restrictive the new regs are, they could devastate the industry not just DVN. The only good news with strict new regs would be a quick increase in nat gas prices. I am curious why no one seems to be factoring this in.

The oil and gas industry could again be on the defensive following new test results from the U.S. Geological Survey that largely confirm previous EPA tests showing high levels of ethane and other chemicals at a Wyoming site. The results were slammed by Encana (ECA), the natural gas company operating in the area, which says the interpretation of the test was flawed. [View news story]

Is this report hype to get us ready for an EPA crackdown on fracking in December?

What Is Encana's Solution To A Cash Crunch? Spend More Of Course [View article]

Encana is Canadian with holdings also in the US. It is involved in building and using the export facility on Vancouver Island to ship LNG to Asia. This is an opportunity not available to most US companies and should make the company very profitable if it can get through the current problem of too little money and too much dry gas. It may also avoid much of the battle over fracking in the US which could really hurt US nat gas companies if the EPA goes after fracking with vigor. And of course ECA may sufffer from the legal ramifications of the brouhaha with CHK in Michigan. I have some puts on ECA in case that situation blows up.